Compute the contribution margin for the video department, when gross profit is $990,000, direct expenses $290,000, and indirect expenses are $120,000.

Question

Quizplus · Accepted Answer

The contribution margin is calculated as Gross Profit minus Direct Expenses. Therefore, $990,000 (Gross Profit) - $290,000 (Direct Expenses) = $700,000. Indirect expenses are not considered in the calculation of the contribution margin.

Compute the Contribution Margin for the Video Department, When Gross